Worried! Interest Rate Predictions...

inquisitivewanderer

grumiofoundation said:

Luke221987 said:

I'm the sort of person that worries about everything.
Most recent worry is around the mortgage on our house. We moved in a couple of years back in order to have my Wifes mother move in with us - she is in poor health and did not have any money to contribute to the purchase, hence mine and my Wifes income alone support us.
We have about £1k of disposable income if we are careful in the average month, depending on whether our 2 children need anything, or there are any birthdays etc.

With the BoE raising the base rate again this week, and predictions for them to hit 2.75% next year, followed by 3% in 2024 (https://tradingeconomics.com/united-kingdom/interest-rate) what is the likely knock-on effect to fixed-rate deals?

I'm locked into two mortgages on my property, one has a fixed term until the end of 2024, and the other 2025. I am to put it bluntly - sh** scared about the possibility of fixing again in 2 years time based on what the fixed-rates could be at that time.

With said disposable income, would it now make sense to overpay on mortgage one (fixed term ending 2024)?

What are the interest rates on your current mortgages?
If you save in a savings account (with interest greater than mortgage) do you trust yourself not to spend this?

What are the early repayment charges on your current mortgages? (to explore remortgaging now if you are terrified of future rate rises)

Thanks everyone for the responses.
Current rates are 1.99% on approx. £102k
Then 1.69% on approx. £186k

ERC is currently 2% on the first mortgage, and will be 3% on the 2nd mortgage come November.

We are thinking overpay on the first mortgage (higher rate) by 1k per month - within the realms of the 10% max overpayment.
Then refix at higher rate, and begin overpaying on the 2nd mortgage until that fixed term ends the following year.
By my calculations, it then suggests the monthly repayments at a guess of 5% for both mortgages will mean monthly payments will be round about the same per month then with all the overpayment on the first mortgage.

In the meantime, hopefully win the lottery and all these worries disappear!

Ganga

Luke221987 said:

grumiofoundation said:

Luke221987 said:

I'm the sort of person that worries about everything.
Most recent worry is around the mortgage on our house. We moved in a couple of years back in order to have my Wifes mother move in with us - she is in poor health and did not have any money to contribute to the purchase, hence mine and my Wifes income alone support us.
We have about £1k of disposable income if we are careful in the average month, depending on whether our 2 children need anything, or there are any birthdays etc.

With the BoE raising the base rate again this week, and predictions for them to hit 2.75% next year, followed by 3% in 2024 (https://tradingeconomics.com/united-kingdom/interest-rate) what is the likely knock-on effect to fixed-rate deals?

I'm locked into two mortgages on my property, one has a fixed term until the end of 2024, and the other 2025. I am to put it bluntly - sh** scared about the possibility of fixing again in 2 years time based on what the fixed-rates could be at that time.

With said disposable income, would it now make sense to overpay on mortgage one (fixed term ending 2024)?

What are the interest rates on your current mortgages?
If you save in a savings account (with interest greater than mortgage) do you trust yourself not to spend this?

What are the early repayment charges on your current mortgages? (to explore remortgaging now if you are terrified of future rate rises)

Thanks everyone for the responses.
Current rates are 1.99% on approx. £102k
Then 1.69% on approx. £186k

ERC is currently 2% on the first mortgage, and will be 3% on the 2nd mortgage come November.

We are thinking overpay on the first mortgage (higher rate) by 1k per month - within the realms of the 10% max overpayment.
Then refix at higher rate, and begin overpaying on the 2nd mortgage until that fixed term ends the following year.
By my calculations, it then suggests the monthly repayments at a guess of 5% for both mortgages will mean monthly payments will be round about the same per month then with all the overpayment on the first mortgage.

In the meantime, hopefully win the lottery and all these worries disappear!

Many years from now when the mortgage is paid off you will wonder what you worried about

joep2

Experts have critizised the recent increase.

https://www.mpamag.com/uk/news/general/property-expert-hits-out-at-bank-of-englands-rate-increases/410106?Region=United+Kingdom

Hopefully the powers to be listen to them and start reducing rates. 

Ganga

joep2 said:

Experts have critizised the recent increase.

https://www.mpamag.com/uk/news/general/property-expert-hits-out-at-bank-of-englands-rate-increases/410106?Region=United+Kingdom

Hopefully the powers to be listen to them and start reducing rates. 

Cannot see it happening ,the people who lend the money make the rules and your only choice is to shop around.

strawb_shortcake

Have you looked at a mortgage calculator and looked at what your repayments would actually be at a higher interest rate? 

I was a little bit worried before, and granted my mortgage is less than yours but seeing the actual numbers helped me feel a bit more confident. 

Currently my rate is 1.79% if I can secure i think 3% later in the year, it would add on £25 a month.

Sounds like you can overpay, could you extend the term a little if needed? And your MIL may not have been able to help with the house purchase but does she, if not could she contribute towards the household bills? 

inquisitivewanderer

annabanana82 said:

Have you looked at a mortgage calculator and looked at what your repayments would actually be at a higher interest rate? 

I was a little bit worried before, and granted my mortgage is less than yours but seeing the actual numbers helped me feel a bit more confident. 

Currently my rate is 1.79% if I can secure i think 3% later in the year, it would add on £25 a month.

Sounds like you can overpay, could you extend the term a little if needed? And your MIL may not have been able to help with the house purchase but does she, if not could she contribute towards the household bills? 

I did, unfortunately doing nothing means at a mortgage of 5% I'd be paying an extra £500 minimum per month come 2025 - if rates rise to 5% that is. Not nice to think about! Especially with everything else going up in price. Who knows what gas/electricity will cost in 2025! Nevermind food bills  

Dandytf

RelievedSheff said:

IAMIAM said:

For me, these are the highest rates I have ever seen since buying in 2016, 

Our mortgage rate was 5.2% in 2007 so not all that long ago.

6.19 2009 -2 yr move in fix.
Since considering 5 yr fix 3.14% from current 2 yr 1.74% fix,
'comfortable with thought of returning to' 4.75/5.25 etc.
time flies indeed.